Darling to announce free basic bank accounts for all UK citizens

There are 1.75 million people in Britain today without a bank account. But that's set to change.

In his Budget tomorrow, the Chancellor is expected to announce new measures under which banks will be legally obliged to provide a free basic bank account to all adult UK citizens.

Alistair Darling is reported to believe that not having a bank account stops some of the country's poorest people from getting back into mainstream society as they don't have access to financial services that the majority of us take for granted.

Watch what you spend: Having a bank account can give you access to cheaper utility tariffs and online discounts

Without an account people cannot pay
by direct debit so don't have access to cheaper rates on their utilities and they also miss out on cheaper goods bought online.

Many of those without a bank account are pensioners, or are too young to pay national
insurance. More than half are among the poorest fifth of the
population, meaning those who need to save money the most are without
one crucial means to do so.

Without access to small amounts of credit, those without an account can also turn to
door-step lenders who charge interest rates of as much as 545 per cent.

It is also thought that those with bank accounts find it easier to find and keep
permanent employment.

The expected announcement follows a commitment in 2003 from within
the banking community to 'universal' banking, which has resulted in the
amount of people without a bank account falling by half in the
subsequent years.

Because banks have already made this commitment, it is thought that they would view new legislation as a bureaucratic burden and would therefore deem it unwelcome.